LONG-TERM RELATIONSHIP BETWEEN WAGES AND LABOUR PRODUCTIVITY IN AGRICULTURAL AND MANUFACTURING SECTOR IN POLAND

Abstract

This paper investigates the long-term relationship between labour productivity and real wages in agricultural and manufacturing sector in Poland in the years 1991–2016. In order to establish the long-run dynamics, autoregressive distributed lag framework (ARDL) is applied. Long run causality running from labour productivity to wages in both sectors is confirmed. The yearly speed of adjustment following change in labour productivity is smaller in agricultural than in manufacturing sector and amounts 24 and 37% respectively. Increase of 1% in labour productivity leads to 0.4% higher wages in agriculture, and to 0.64% higher wages
in manufacture.